© OECD/IEA 2016© OECD/IEA 2016

GBEP Bioenergy Week

Budapest, 21 June 2016

Simone LandolinaActing Head

International Partnerships and Initiatives Unit

Energy Technology Perspectives and Bioenergy Policy at Global and

Local Level

© OECD/IEA 2016

First clear signs of decoupling of CO2 emissions and GDP

Global energy-related CO2 emissions remained flat in 2015 for the second year in a row

Renewable power capacity at record high with over 150 GW installed in 2015

COP21 provided a historic push for clean energy

Start of a new era of collaboration: Country-based approaches preferred to top-down regulation

New goals put forward – going beyond what everyone already considered challenging when IEA’s first ETP was released in 2006

Growing recognition that greater innovation is essential to meet ambitious climate goals

Context

© OECD/IEA 2016

Contribution of technology area to global cumulative CO2 reductions

The scale of the challenge

0

5

10

15

20

25

30

35

40

45

2013 2020 2030 2040 2050

GtC

O2

Renewables 32%

Energy efficiency 32%

Fuel switching 10%

Nuclear 11%

CCS 15%2DS

4DS

Source:

IEA Energy Technology

Perspectives 2016

The carbon intensity of the global economy can be cut by two-thirds through a diversified energy technology mix

Bioenergy provides around 10% of the cumulative reductions.

Bio-CCS accounts for 2% of the cumulative reductions.

© OECD/IEA 2016

Cities in emerging/developing economies will be critical

Two-thirds of the growth in global energy demand to 2050 comes from cities in emerging and developing economies

Final energy demand in the 4DS

Urban non-OECD

Urban OECD

0

100

200

300

400

500

600

2015 2020 2025 2030 2035 2040 2045 2050

EJ

Urban OECD

Urban – Emerging/developing

Urban - World

Non-Urban – World

Urban – Developed economies

© OECD/IEA 2016

Primary energy demand by fuel and scenario

0

50

100

150

200

250

300

Coal Oil Gas Nuclear Hydro Biomass andwaste

Otherrenewables

EJ

2013

6DS 2050

4DS 2050

2DS 2050

In 2DS, by 2050 the share of fossil fuels in primary energy is almost halved. Biomass becomes the largest energy source.

Global primary energy demand

© OECD/IEA 2016

Other renewable power

Buildings

Nuclear

Transport

Appliances and lighting

Energy storage

Industry

Biofuels

Carbon capture and storage

More efficient coal-fired power

Electric vehicles

Solar PV and onshore wind

Technology Status today against 2DS targets

●Not on track ●Accelerated improvement needed ●On track

Clean energy deployment is still overall behind what is required to meet the 2°C

goal, but recent progress on electric vehicles, solar PV and wind is promising

Progress in clean energy needs to accelerate

© OECD/IEA 2016

Global biofuels production

Global biofuels production and medium-term forecast compared with IEA 2DS scenario requirements

A significant advanced biofuels contribution, alongside improved fuel economy and EV roll-out, is central to decarbonisation of the transport sector.

4% Road Transport Fuels

© OECD/IEA 2016

The share of non-hydro renewable electricity generation is rising, however bioenergy’s growth is relatively slower than onshore wind and PV.

Renewable electricity generation growing steadily

Renewable electricity generation by technology (2005-20)

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Gene

ratio

n (TWh)

Hydropower Bioenergy Onshore wind Offshore wind Solar PV Geothermal STE Ocean

10%

25%

37%Share of non-hydro renewable generation

54%

28%

22%Share of bioenergy in non-hydro

renewable generationForecastHistorical

© OECD/IEA 2016

Biomass power: increased competition from variable renewables

Historical and forecast global weighted average generation costs for new onshore wind and PV plants vs. selected reference bioenergy LCOEs

High levels of incentives are no longer necessary for solar PV and onshore wind in many markets. Opportunities for biomass power focus on the most promising

applications.

© OECD/IEA 2016

Further policy support required to accelerate growth in biomass heat

Consumption of modern renewable energy for heat 2008-20

Challenges persist to decarbonising the heat sector, however established renewable heat policies have proved successful.

0

2

4

6

8

10

12

14

16

18

20

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

EJ

Geothermal Solar thermal Modern bioenergy

© OECD/IEA 2016

Numerous bioenergy technologies do not require high levels of financial support, however policies remain vital to stimulating investments

So, the focus should shift away from economic incentives towards creating the conditions by:

Providing a long term stable policy framework that leads to a predictable market

Provide certainty of income through long term PPAs

Dynamic policy approach differentiating by sector (industry / buildings / transport)

The right support depends on the maturity of the technology and the degree of market uptake

Tackle non-economic barriers

Address system integration issues

Supporting bioenergy deployment

© OECD/IEA 2016

Energy resources within cities

Biofuels

Bioenergy has the potential to provide a contribution to all energy needs and

plays a very important role in

low-carbon energy scenarios in each

sector

© OECD/IEA 2016

With cost reductions in onshore wind and PV systems, biomass power applications focus on the most promising technology under local conditions.

Further policy action is needed for heat and biofuel sectors, in the face of structural challenges (low oil price environment). Wavering policy commitments risk undermining investor confidence and market growth.

COP21 was historic and a catalyst for more innovation, research and investment in clean energy technologies

Acting together with industry, national and local governments can drive innovation through international co-operation

Closing remarks

© OECD/IEA 2016© OECD/IEA 2015

Thank you for your attention!

© OECD/IEA 2016

Additional material

© OECD/IEA 2016

Role of biomass with CCS in the 2DS

Almost 1 Gt of CO2 captured in 2050 is linked to biomass with CCS, corresponding to 16% of total CO2 captured globally.

0

1

2

3

4

5

6

7

2013 2020 2030 2040 2050

CO

2ca

ptu

red

(G

t C

O2)

Bio-CCS fuel transformation

Bio-CCS power generatiion

Fossil CCS industry and fueltransformation

Fossil CCS power generation

© OECD/IEA 2016

Focus on low carbon fuels

In 2DS, 2050 demand for alternative energy carriers attains nearly 15 EJ in cities and exceeds 20 EJ for non-urban transport

This is more than twice the urban demand of 4DS, and three times larger for non-urban

2DS-4DS differences in 2030 are smaller: the uptake of alternative fuel vehicles and low-carbon fuels is stronger in the long term

2DS 4DS

0

5

10

15

20

25

2010 2020 2030 2040 2050

No

n-u

rban

en

ergy

dem

an

d (E

J)

Ethanol Advanced ethanol BiodieselAdvanced biodiesel Biogas Aviation biofuelsShipping biofuels Electricity Hydrogen

0

5

10

15

20

25

2010 2020 2030 2040 2050

Urb

an e

ner

gy d

ema

nd

(EJ)

2010 2020 2030 2040 2050 2010

2010 2020 2030 2040 2050 2010

© OECD/IEA 2016

Paris Agreement

175 Parties signed at New York ceremony on 22 April. Currently:

• 177 signatories

• 17 ratifications (covering 0.04% of global emissions)

Entry into force with ratification/entry by countries representing 55% of global emissions, expected between 2016 and 2018

• United States and China intend to ratify in 2016